Stocks Fall on China Retaliatory Tariffs
23 August 2019 - 11:31PM
Dow Jones News
By Caitlin Ostroff
-- U.S. stock futures drop
-- European stocks reverse earlier gains
U.S. stock futures faltered after China said it will impose
retaliatory tariffs on $75 billion worth of additional U.S.
products.
The ratcheting-up of trade tensions came ahead of a highly
anticipated speech from Federal Reserve Chairman Jerome Powell
later Friday on the future of monetary policy.
S&P 500 futures were down 0.5% and Dow Jones Industrial
Average futures fell roughly 0.5%. Futures don't necessarily
predict moves after the opening bell.
Markets will be watching for clarity from Mr. Powell and other
central-bank leaders at the Jackson Hole symposium on the
likelihood of further moves to lift a stagnant global economy.
Lower interest rates would likely drive down bond yields further
and rally equities, said Connor Campbell, a financial analyst at
Spreadex. "They're putting a lot of their eggs in a central-bank
basket," Mr. Campbell said of stock-market investors.
Mr. Powell is set to speak Friday at 10 a.m. ET. Bank of England
Gov. Mark Carney will speak later in the day.
Analysts said the Fed chairman will have to show he is willing
to take strong action to support the economy. Dallas Fed President
Robert Kaplan said Thursday at the gathering of central bankers
that he was open to cutting rates in September.
Though Mr. Kaplan came out in support, other officials were
split. In television interviews Thursday, the head of the Kansas
City Fed and the Philadelphia Fed pushed back against the need for
further rate cuts. In July, the Fed lowered its benchmark rate.
Friday's moves in stocks came a day after a series of weak
manufacturing data around the world raised concerns about a
possible recession, weighing on U.S. indexes.
The 10-year yield on Thursday briefly fell below two-year
yields, following a similar move last week. The inversion between
short- and long-term yields has been widely viewed as a possible
recession signal.
The Stoxx Europe 600 slipped 0.2% in afternoon trade.
Toronto-based and U.K.-listed Entertainment One's shares jumped
31% in recent trading after toy maker Hasbro said it would buy it
for $4 billion. Hasbro's shares fell 3.5% in U.S. premarket
trading.
The WSJ Dollar Index, which measures the currency against a
basket of its peers, ticked up 0.1%.
Gunjan Banerji contributed to this article.
Write to Caitlin Ostroff at caitlin.ostroff@wsj.com.
(END) Dow Jones Newswires
August 23, 2019 09:16 ET (13:16 GMT)
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